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  • US Consumer Price Index - July 2024

    From bls.gov

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis, after declining 0.1 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment. The index for shelter rose 0.4 percent in July, accounting for nearly 90 percent of the monthly increase in the all items index. The energy index was unchanged over the month, after declining in the two preceding months. The index for food increased 0.2 percent in July, as it did in June. The food away from home index rose 0.2 ... (full story)

Added at 8:34am

  • Inflation milestone: Consumer Price Index slows below 3% for first time since March 2021

    From edition.cnn.com

    Price hikes slowed more than expected in July, and, for the first time in more than three years, the Consumer Price Index has landed below 3%. Consumer prices rose 2.9% for the 12 months ended in July, slowing from June’s 3% annual gain, according to the Bureau of Labor Statistics’ latest CPI report released Wednesday. On a monthly basis, prices rose 0.2% after posting a 0.1% decline the month before. The cost of owning and renting a home rose 0.4%. That so-called shelter index accounted for nearly 90% of the monthly increase, BLS said in the report. Economists were expecting a 0.2% monthly increase and an annual ... (full story)

USD seemed to weaken last night after PPI data was softer than expected. Now CPI Y/Y data is also softer than expected but USD is showing strength against most currencies.. what did I miss here? tia
Soft. Market is still too dovish on rates, hence data wasn't soft enough to continue to believe there will be a 50 bps rate cut in Sept. That's why we're seeing strength in the USD.

Notables:

Although it appears it came out inline with expectations, CPI m/m to three decimals came it at 0.155%

Same with the core number, Core CPI m/m 0.165%

Energy Index remained unchanged in July after a 2.0% decrease in June.

Used Cars and Trucks fell 2.3% in July, a sharper decline than the 1.5% drop in June.

Apparel decreased by 0.4% in July, following a 1.2% increase in June.


Shelter Index increased by 0.4% in July, contributing to nearly 90% of the overall CPI increase. This is a consistent rise from previous months and remains a significant inflation driver. It's up 5.1% y/y.

Food Index rose 0.2%, mirroring the June increase.

Gasoline prices rose 0.8%

The Motor Vehicle Insurance index surged by 1.2%, marking a continued upward trend.
We must learn who is gold, and who is gold plated
EventsTrader Live Return This Year: 54.4%
no cut rates for September
Follow price direction
the dollar will rise again
Successful trading is knowing yourself, not the market.
demo5 All Time Return: 177.6%
This will not effect on rate cut. Inflation is slowing and very cooling. labor market is very cool. This is not sufficient to protect rate cut. need more evidence.
Rate cut in September
Lots of political pressure for a rate cut. Hear the "R" word more and more lately. Think we get a September rate cut based on todays read.
Quoting Vancarbon
Slowing economy = Slowing inflation Bear market ahead and watch for the continuation of the carry trade rout The big fish are offloading into the rebound .
I was surprised to see PPI read produce a big move yesterday, but after that, I expected CPI to be a non-mover. The inflation data is second fiddle to the jobs and econ outlook data now. If the latter continue to slide, we should see stocks pull back. That is the typical scenario going into a cutting cycle. Add in the elections angst and growing exogenous risk of foreign war impacts, and I'd say the next 2-3 months are going to be quite volatile, with stocks making another leg down, maybe all the way to the elections.
"If The Fool persists in his Folly he will become wise." - William Blake
Quoting Vancarbon
Slowing economy = Slowing inflation Bear market ahead and watch for the continuation of the carry trade rout The big fish are offloading into the rebound .
If true (bear marking incoming), then today should see a retracement as all majors are approaching/at either 20 or 50-day MA's. Could be a nice play off the open here with little upside risk to take some longs off the table and/or initiate some shorts. Of course, if it DOESN'T happen that way and the markets go up, there is air above where we are now and the August 1, 2024 highs.....It would be poetic if the /rty (after putting in a huge, spikey top on 7/31/2024 before taking off 2.5% and leading the charge down that afternoon) just threw in another near-term high on CPI this morning. It is already off nearly 1.5% from that pop whereas the /nq and /es are back to their highs.

All that said, I still chuckle a bit when reading comments like "no rate cuts in September". Trend is your friend here. The market's have baked in the chance of a rate cut as 100% for weeks (7/12/2024 onward). It hasn't changed. The SIZE of the September rate cut has shifted slightly. And, yes, there has been overreaction in the quantity of 2024 rate cuts as well....but a cut in September has been consistently priced in.

For those who don't know where to the find the market's position on this: https://www.cmegroup.com/markets/int...atch-tool.html

Why is this important? Because, if you believe the markets are "smart" (which I will leave everyone to interpret for themselves), then the vocal minority spewing "no rate cuts in September" is certainly going against the tide.

Ftmofx is correct, IMHO. This data will not affect a September rate cut occurring. Events trader's point about it not being a 50bps cut, however, is likely accurate too (the chance dropped by 12% since yesterday of a 50bps cut).

So, word of advice for those who browse the forums looking for guidance from the comments. This is not the end-all-be-all source of accurate information (myself included). Keep learning everything you can about markets, and use these turbulent times to help guide your trading future.

Happy trading!
GOLD / XAUUSD = big trader in risk / hedging ..... next bulls target 2525

The FED will not take rash action to cut interest rates amidst the still high inflation rate and increasingly heated geopolitical situation.
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Quoting Xau-gold
Gold down to 2050 by October
it's already going to crash. i am on strong sell
Quoting hesron
GOLD / XAUUSD = big trader in risk / hedging ..... next bulls target 2525 The FED will not take rash action to cut interest rates amidst the still high inflation rate and increasingly heated geopolitical situation.
How do you define "high inflation"? Take a look at EventsTraders post above. Assuming a continuation of the existing path, and there is no compelling reason not to do so, September values will be below historical averages.

...so why do you think the FED wouldn't issue a 25bps cut when they have been saying all along that waiting too long is as bad as cutting too early?
Quoting ffghost
{quote} If true (bear marking incoming), then today should see a retracement as all majors are approaching/at either 20 or 50-day MA's. Could be a nice play off the open here with little upside risk to take some longs off the table and/or initiate some shorts. Of course, if it DOESN'T happen that way and the markets go up, there is air above where we are now and the August 1, 2024 highs.....It would be poetic if the /rty (after putting in a huge, spikey top on 7/31/2024 before taking off 2.5% and leading the charge down that afternoon) just threw...
The one thing in this report that was the leading contributor to continued excessive inflation was housing …. If they cut rates housing probably more than anything else will gain strength and that number will be even higher, plausibly causing inflation to INCREASE instead of continue to go down. Jerome Powell already said he expects housing prices to go UP when they cut rates. Even though housing isn’t their mandate they know this and aren’t stupid to make a bad choice. The market has been consistently wrong on cuts so far it’s constantly been pricing them in since at least last year. Not saying I know they will or won’t cut or if they do by what but they would be pretty stupid to start cutting now and risk inflation start rising again. It’s still just too strong no matter what the market “wants” IMHO (and keep in mind the market has always wanted cuts… if it was up to them inflation never would have cooled since they would have never wanted any rise in the interest rates).
Quoting ffghost
{quote} How do you define "high inflation"? Take a look at EventsTraders post above. Assuming a continuation of the existing path, and there is no compelling reason not to do so, September values will be below historical averages. ...so why do you think the FED wouldn't issue a 25bps cut when they have been saying all along that waiting too long is as bad as cutting too early?
P.s. even though they’ve said they don’t want to cut too soon or too late (risks in both) since they don’t have a crystal ball, my bet is if they had to be wrong in one of those directions I’m guessing they’d rather be wrong on cutting too late than too soon, not the other way around… the absolutely worst case scenario is that they cut too soon and it starts going up again and they have to shock and whipsaw the market by suddenly raising again after having started cutting! That would not only cause possible chaos but would be a huge failure and embarrassment to them, one I think they’d avoid at all costs. It will be easier for them to just cut faster (by a bigger amount) if they wait too long and “break something”, again IMHO.
Them acknowledging they don’t want to cut too late either was probably just to quell the markets fears since market has been on their tails about demanding cuts. I can only imagine the amount of pressure they’ve faced by a market that just won’t shut up about rate cuts this entire time. Kinda like when the kids on a road trip constantly ask “are we there yet are we there yet” and mom and dad obviously say “sure we’re almost there” . The fed is most worried about cutting too soon, not too late I think
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Quoting Dforexgold
Them acknowledging they don’t want to cut too late either was probably just to quell the markets fears since market has been on their tails about demanding cuts. I can only imagine the amount of pressure they’ve faced by a market that just won’t shut up about rate cuts this entire time. Kinda like when the kids on a road trip constantly ask “are we there yet are we there yet” and mom and dad obviously say “sure we’re almost there” . The fed is most worried about cutting too soon, not too late I think
Your logic is sound: cutting, and then having to raise would be really bad.

Economies are like huge ships, you move turn off the engine and the thing takes miles to stop. Turing it off too early (and not making it to your destination, so you have to start up again for the extra push) is bad. Turning off too late, and you hit the dock. Also bad. There's a huge balancing act, as you indicated, and the reality is that there's ZERO way to know the right time....but oh, if we had that crystal ball you referenced, right?!?

I'll agree that the markets have been incorrect in the number and timing of cuts, but I do believe the data over the past 2 quarters has been trending in the right direction. Of course, I don't know what next month's data holds, but at some point, the waters get tested by a small cut and communication that "time" will be required once again to determine the effect of that cut.

However, waiting too long to test those waters leads to a rapid pace of subsequent cuts...and that, as we've seen in the past, is usually a bad thing (as the markets read it to mean "we waited too long and things are now worse than we thought!")

Time will tell. Until then, we still have some volatility in this market (good for traders). After today, the media rhetoric will shift to the democratic national convention and politics (as if that mattered to markets other than pumping in some short-term vol)....so we'll have to read/hear about that nonsense for several months. Uhg. What a world it would be if all candidates spoke about their vision in an attempt to educate the electorate and didn't simply spend breath berating their opponents. .......if only wishing made it so.......
Inflation is slowing, but the Fed still hasn't hit it's target goal of 2%. It's possible they cut a quarter percent, but I'm leaning toward no cut in Sept. Maybe November.
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You all forget about underlaying inflation, most prob no cut for September becouse the deficil would fly, and right before elections? yeah I dont think so
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